PROCUREMENT OF DUTY AND TAX FREE INPUT GOODS FROM BONDED WAREHOUSE UNDER DTRE SCHEME

LIST OF NOTIFICATIONS REPRODUCED IN THE <!--[if gte mso 9]> PROCUREMENT OF DUTY AND TAX FREE INPUT GOODS FROM BONDED WAREHOUSE UNDER DTRE SCHEME By Mr. Javed Akhtar, Advocate, Lahore Under DTRE Rules, an exporter can import input goods free of duty and taxes. A question has arisen whether a DTRE approved person can procure duty and tax free input goods from a bonded warehouse. In case of private bonded warehouse, the input goods are primarily imported by the same person who has been granted DTRE approval. In such a case, he can file ex-bond bill of entry and get exemption of duty and taxes on these input goods under DTRE. However, in case of goods imported by some other person and placed a public warehouse, can a DIRE approved person procure these goods without payment of duty and taxes. This question was referred to C.B.R. by Collector of Customs, Port Qasim, Karachi vide his letter No. S6/IMP/Port/10/PQ-Bulk dated 4-11-2003 the following two observations were primarily raised: (i) Under Serial No. 11 of C.B.R's. Letter C.No. 4(8)TEPI/2001, dated 7th April, 2003, a DTRE approved manufacturer can purchase goods free of duties and taxes from a private bonded warehouse, while in the instant case the warehouse is a public bonded warehouse. (ii) Under rule 297(5)(ii), DTRE exporter can procure imported goods free of duties and taxes from another DTRE approved person after approval from the Collector while Messrs Cargil Pakistan Holdings, Karachi are not DTRE approval person. 2. C.B.R. vide its Letter C.No. 4(8)2001-DTRE dated 17-11-2003 has been pleased to observe that: Rule 297(5)(ii) covers sale or purchase of goods already imported free of duty and taxes under a DIRE approval provided such sale or purchase takes place between two DIRE approved persons. This provision does not create any obstacle for purchase of goods free of duty and taxes by a DTRE approved person from a private bonded warehouse, in which case, the licensee of the warehouse is the owner of warehoused goods and needs not be a DIRE approved person. The said provision should, by implication; not create any bar on the purchase of goods free of duty and taxes under a valid DTRE approval from a public bonded warehouse where the owner (importer) of the goods is a different person from the licensee of the warehouse. 3. C.B.R. vide its above referred letter dated 17-11-2003 has been pleased to clarify that a DTRE approved person can purchase his approved inputs free of duty and taxes from an importer who may not be a DTRE registered person and whose imported goods are stored in a public bonded warehouse. Copy of C.B.R's. letter dated 17-11-2003 is enclosed for your record. C.B.R. LETTER C.NO. 4(8)/2001-DTRE DATED 17th NOVEMBER, 2003 SUBJECT: PROCUREMENT OF DTRE INPUT GOODS FROM BONDED WAREHOUSE Please refer to your letter No. S6/IMP/Port/10/PQ-Bulk dated 4th November, 2003, on the subject. You have primarily raised the following two observations and solicited C.B.R's. clarification: (iii) Under Serial No. 11 of C.B.R's. Letter C.No. 4(8)TEPI/2001, dated 7th April, 2003, a DTRE approved manufacturer can purchase goods free of duties and taxes from a private bonded warehouse, while in the instant case the warehouse is a public bonded warehouse. (iv) Under rule 297(5)(ii), DTRE exporter can procure imported goods free of duties and taxes from another DTRE approved person after approval from the Collector, -while Messrs Cargil Pakistan Holdings, Karachi are not DTRE approval person. 2. The matter has been examined in C.B.R. The viewpoint is that Rule 297(5)(ii) covers sale or purchase of goods already imported free of duty and taxes under a DIRE approval provided such sale or purchase takes place between two DTRE approved persons. This provision does not create any obstacle for purchase of goods free of duty and taxes by a DIRE approved person from a private bonded warehouse, in which case, the licensee of the warehouse is the owner of warehoused goods and needs not be a DIRE approved person. The said provision should, by implication, not create any bar on the purchase of goods free of duty and taxes under a valid DIRE approval from a public bonded warehouse where the owner (importer) of the goods is a different person from the licensee of the warehouse. 3. C.B.R. is, therefore, pleased to clarify that a DTRE approved person can purchase his approved inputs free of duty and taxes from an importer who may not be a DTRE registered person and whose imported goods are stored in a public bonded warehouse. [Issued by C.B.R., under the signature of Mr. Iftikhar Qutab, Chief (DDS), addressed to the Collector, Collectorate of Customs, Port Muhammad Bin Qasim Karachi, with reference to his Letter No. S6/IMP/Port/10/PQ-Bulk dated 4th November, 2003 and also copy endorsed to all the Collector.]